Correlation Between PetMed Express and Alibaba Health
Can any of the company-specific risk be diversified away by investing in both PetMed Express and Alibaba Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PetMed Express and Alibaba Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetMed Express and Alibaba Health Information, you can compare the effects of market volatilities on PetMed Express and Alibaba Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PetMed Express with a short position of Alibaba Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetMed Express and Alibaba Health.
Diversification Opportunities for PetMed Express and Alibaba Health
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between PetMed and Alibaba is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding PetMed Express and Alibaba Health Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Health Infor and PetMed Express is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PetMed Express are associated (or correlated) with Alibaba Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Health Infor has no effect on the direction of PetMed Express i.e., PetMed Express and Alibaba Health go up and down completely randomly.
Pair Corralation between PetMed Express and Alibaba Health
Assuming the 90 days horizon PetMed Express is expected to generate 1.52 times more return on investment than Alibaba Health. However, PetMed Express is 1.52 times more volatile than Alibaba Health Information. It trades about 0.17 of its potential returns per unit of risk. Alibaba Health Information is currently generating about -0.11 per unit of risk. If you would invest 516.00 in PetMed Express on September 12, 2024 and sell it today you would earn a total of 98.00 from holding PetMed Express or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetMed Express vs. Alibaba Health Information
Performance |
| Timeline |
| PetMed Express |
| Alibaba Health Infor |
PetMed Express and Alibaba Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetMed Express and Alibaba Health
The main advantage of trading using opposite PetMed Express and Alibaba Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetMed Express position performs unexpectedly, Alibaba Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alibaba Health will offset losses from the drop in Alibaba Health's long position.| PetMed Express vs. Walgreens Boots Alliance | PetMed Express vs. Alibaba Health Information | PetMed Express vs. Sugi Holdings CoLtd | PetMed Express vs. Beijing Tong Ren |
| Alibaba Health vs. MSAD INSURANCE | Alibaba Health vs. Reinsurance Group of | Alibaba Health vs. Autohome ADR | Alibaba Health vs. Corporate Office Properties |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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